Company Insolvency Is Avoidable
Company insolvency can be the worst experience of your career. The bank takes over and you are out of a job in a public way. You must avoid company insolvency at all costs.
Here are some tips on what to do if your company is on the brink of insolvency.
Our first tip is avoid default if possible. Make paying your bank the priority. Stretch your trade creditors as much as possible. If you are only having a temporary cash shortfall, this may be all you need for your company to avoid insolvency.
However, if your business problems are long-term, then you must create a reasonable business rescue plan. The business rescue profession calls this a turnaround plan.
The best source for how to create a turnaround plan is Dan Betts’s
The Insider Secrets to Saving Your Business: The Step-by-Step Turnaround Guide.
Dan Betts is a respected international turnaround and business rescue professional.
See Company
Insolvency Handbook to learn more.
When your business is in default of your loan contract, you should be proactive.
Come to the banker first with your turnaround plan. If your banker has confidence
in you and your plan, the bank will likely give you and your management team
more time to carry out you plan.
A word of warning: Be truthful in all of your dealings with
your banker. If your banker catches you in a lie, be certain that he or she
will remove you, your management team and your directors. Also, bankers are
by their nature conservative. Therefore, you should show areas in your plan
where you have been conservative with your assumptions.
Taking action without thinking is disastrous when fixing your business. It
is much better to take a few days with your management team, discuss the circumstances
and then decide on a proper course of action.
Read as much as you can about how to turnaround your business. Taking the extra time now will save you time in the months ahead and prevent you from making unnecessary errors.
Best wishes. Let us know if we can help.
Privacy Policy - Terms of Use - Legal Disclosures